To Gain Jobs, Michigan Must Get Smart, Not Try the Same Old Strategies Again

To Gain Jobs, Michigan Must Get Smart, Not Try the Same Old Strategies AgainBy Rick Haglund

February 1, 2010/The Grand Rapids Press

Please, dear citizens, disabuse yourselves of the notion that reforming state government and reinvigorating manufacturing by themselves will restore Michigan's fortunes.

The state's shell-shocked economy is too far gone and the world has changed too much for those traditional fixes to work.

Michigan has lost nearly 1 million jobs since 2000. Economists estimate that it could take as long as 25 years to replace them all.

Cutting taxes and waiting for the auto industry to rebound are inadequate solutions to speeding up the recovery.

We're done that repeatedly during the past 30 years and our jobless rate stands at 14.6 percent, the same as it was at the end of 1983 as the state emerged from recession.

Isn't the definition of insanity doing the same thing over again and expecting a different result?

It's going to take new strategies forged by leaders in the academic, business, government and nonprofit sectors to breath new life into our state.

Equally important, Michigan's nearly 10 million citizens must finally awaken to the fact that the days of good-paying, low-skilled jobs are gone and that their ticket to a prosperous future is an associate's degree, at least.

"We're still trying to keep what we've had in the past," said Keith Molin, who served stints as head of the Labor and Commerce departments during Gov. William Milliken's administration. "We don't talk about a transition to a new economy. Industry doesn't talk about it, either.

"There has to be the ability to see the old is passing away," said Molin, who now is the executive director of the Michigan State Housing Development Authority.

The way Michigan produced wealth and created jobs for 100 years no longer works in an economy that increasingly depends on applying knowledge rather than applying parts to a vehicle on an assembly line.

We shouldn't ignore manufacturing. Making cars, office furniture and other goods will continue to be an important part of the state's economy.

Just look at Ford Motor Co., widely praised for an impressive turnaround without taking government loans. It recently offered buyouts to all of its 41,000 U.S. hourly workers.

Ford and other automakers might hire hourly workers in the future, but they'll start out at about $14 an hour, roughly half the wage rate paid to current workers.

Many are saying that despite this being an election year, the politicians in Lansing should set aside their differences and enact reforms, including drafting a new tax code and restructuring state services.

But don't expect lawmakers to build a bonfire on the front lawn of the Capitol and sit around it in a circle with arms locked while they sing "Kumbaya." The political culture is too toxic.

We're also not talking nearly enough about things that will matter more in the long run: developing an entrepreneurial business culture, funding investments such as roads and higher education, and keeping and attracting talent.

"Businesses locate where the smart people are," said Chris Holman, the Michigan Economic Development Corp's small business advocate, at a news conference last week Monday on the benefits of early childhood education.

What Holman called a "90-year free ride" on the back of the auto industry is over. The implications of that are either scary or exciting, depending on how we respond.

Posted on Monday, February 01, 2010 (Archive on Monday, January 01, 0001)Posted by rcline Contributed by rcline